Abu Dhabi: Two-thirds of UAE expats admit that they are not saving enough for retirement, a new study suggests.
The survey, published in the October issue of 999 magazine, reveals a large majority of expats are putting off long-term retirement goals in view of their day-to-day financial responsibilities.
999 is an official English monthly brought out by the Ministry of Interior.
The poll, undertaken in September, shows that 65 per cent of respondents say they are unable to put aside enough in order to reach their monthly retirement savings goal because of other financial responsibilities.
About a quarter (24 per cent) of respondents said they try to stick to a plan and save at regular intervals while 61 per cent said they stock up on their retirement savings whenever they can — but not regularly enough and not as much they would like to.
Surprisingly, 15 per cent of respondents said they aren’t saving at all for their retirement, which a financial expert described as a worrying sign.
“Inadequate savings today would make it harder for people to support and sustain themselves in the future. It will also be difficult for them to maintain during retirement the same standard of living enjoyed in the present,” said Samira Zakour, chief marketing officer of NBAD Trust Services, a subsidiary of the National Bank of Abu Dhabi.
The 999 survey was handed out to a sample of 450 expats of different nationalities and asked if they were saving enough money for their retirement.
The top reason for being unable to save was that they did not see the need to save for retirement since it is perceived as too distant to prepare for.
Other reasons why residents are not saving enough are the rising cost of living (60 per cent), they are not earning enough money (22 per cent), servicing of loans (nine per cent) and other expenditures (nine per cent).
Wealth managers and financial consultants that 999 magazine consulted for the report had a common piece of advice for UAE expats: Those who save as early as their first job have higher chances of having enough pension in later years and have lesser risks with long-term investments.
Lt Colonel Awadh Saleh Al Kindi, Editor-in-Chief of 999, said: “There’s no way around the issue of retirement savings: everyone must make it a priority to set aside part of their income toward that goal.”
He added: “Our survey reveals a worrying trend and indicates that there is a lot of room for improvement. It is never too early to start investing in a retirement plan. Once that is taken care of, people will find it more pleasurable to enjoy their life, which the higher leadership strives to protect, secure and make better for everyone.”
While the UAE Labour Law requires employers to provide expatriate staff with an end-of-service gratuity payment — a lump sum based on an employee’s length of service — there is no pension scheme for expats.
Dubai is reviewing a pension scheme, seeking to become the first city in the region to create a pension fund for expatriates.
Zakour said: “An ideal way to save is to be disciplined enough and put some funds aside regularly. For example, to make a habit of apportioning a certain percentage of one’s earnings or monthly salary for safekeeping. That way, one is budgeting for expenses for the longer term and unexpected outgoings as one grows older and also saving for the future.”
